An above average harvest and strong demand for grain has led CBH Group to record a surplus of $133.8 million, despite supply chain issues and material demurrage costs.
It is the largest surplus the cooperative has posted in five years and well exceeds the $11 million surplus recorded in 2020.
The group’s revenue increased from $3.2 billion in 2020 to $4 billion in 2021.
Its marketing and trade division had a record year with a surplus of $76.6 million, dispelling concerns about the impacts of China’s ban on Australian barley.
CBH Group chief financial officer Stewart Hart said the division had capitalised on strong global demand following production issues in other global grain producers.
“The team has also done well to open new markets and re-establish trade flows into some re-emerging markets to replace the loss of the China barley market last year,” Mr Hart told reporters in a media call.
CBH re-established a market for barley feed in Saudi Arabia and sent malt to South America.
The marketing and trade figures also included $13.9 million in profits from the sale of Newcastle Agri Terminal in September.
Operations produced a surplus of $43.7 million, due to an above average harvest in the 2020/21 season.
Of the 15.1 million tonnes of grain received in 2020, 13.4 million was shipped.
The group’s fertiliser business increased sales by 47 per cent from 125,000 tonnes in 2020 to 184,000 tonnes in 2021.
Mr Hart said the continued growth allowed for a dedicated $55 million storage facility to be built in Kwinana.
The facility was approved in July and is due to be completed in the first half of 2023.
Despite the positive financial results, demurrage, costs incurred for failing to load ships in the agreed timeframe, increased significantly to $17.3 million.
The group said supply chain issues caused delayed vessel loading times at grain terminals.
CBH Group acting chief executive Ben Macnamara said these issues were caused by a series of matters throughout the year.
“Last year it was a combination of rail drivers, availability of truck drivers, given the resources sector, closed borders, on top of that there were a number of significant weather events that we encountered as well,” he said.
He said disruptive weather events included Cyclone Seroja, bushfires in Kwinana, flooding in Northam and heavy rain in Albany.
It was a good year for CBH’s investments.
CBH owns a 50 per cent stake in Interflour Group and received $7.8 million in profit.
Global demand for oats led CBH-owned Blue Lake Milling to increase the tonnes it exports by 40 per cent.
CBH Group also invested $254.2 million in its own network, including $35.8 million on emergency storage and $109.6 million on sustaining capital projects.
“We do expect to continue spending at these types of levels for at least the foreseeable future, and I’m talking about somewhere in the realm of five plus years,” Mr Macnamara said.
“The task is getting larger and therefore we will continue to focus on outloading projects but there will also be a requirement to add additional storage to the network.”
The financial results come as the cooperative is harvesting its 2021 crop.
Mr Macnamara said 14.7 million tonnes had been delivered, already surpassing the five-year average.
